Canada deputy PM quits in tariff rift with Trudeau

Canada's Deputy Prime Minister Chrystia Freeland has quit in a surprise move after disagreeing with the country's leader Justin Trudeau over US president-elect Donald Trump's tariff threats.

The resignation of Ms Freeland marked the first open dissent against Mr Trudeau from within his cabinet, and may threaten his hold on power.

Mr Trudeau, the Liberal leader, lags 20 points in polls behind his main rival, Conservative Pierre Poilievre, who has tried to topple the government and force a snap election three times since September.

"It's not been an easy day," Mr Trudeau commented at a fundraiser yesterday evening. But in difficult times, he added, "we must all pull together".

Ms Freeland's departure came just hours before she was scheduled to provide an update on the nation's finances.

The deputy leader said in her resignation letter to Mr Trudeau the country "faces a grave challenge," pointing to Mr Trump's planned 25% tariffs on imports from Canada.

"For the past number of weeks, you and I have found ourselves at odds about the best path forward for Canada."

Mr Trump reacted to Ms Freeland's surprise departure, writing: "She will not be missed!!!"

"Her behavior [sic] was totally toxic, and not at all conducive to making deals which are very good for the unhappy citizens of Canada," Mr Trump said in a post on Truth Social.

First elected to parliament in 2013, Ms Freeland, a former journalist, joined Mr Trudeau's cabinet two years later when the Liberals swept to power, holding key posts including trade and foreign minister, and leading free trade negotiations with the European Union and the United States.

Most recently, she had been tasked with helping lead Canada's response to the incoming Trump administration.

As the first woman to hold the nation's purse strings, she had also been tipped as a possible successor to Mr Trudeau.

LeBlanc takes over

By day's end, Dominic LeBlanc, the public safety minister, was sworn in as the new finance minister, just as the government announced a $62 billion deficit (€41.38bn) - about $22bn more than projected - due to "unexpected expenses."

Mr LeBlanc now takes the reins on negotiating with team Trump, and has promised to be "focused on the challenges" ahead.

Canada's main trading partner is the United States, with 75% of its exports each year going to its southern neighbour.

Mr Trudeau flew to Florida last month to dine with Mr Trump at the latter's Mar-a-Lago resort and try to head off the tariff threat, but nothing yet indicates the US President-elect is changing his position.

In her letter, Ms Freeland said the country needed to take Mr Trump's tariffs threats "extremely seriously."

Warning that it could lead to a "tariff war" with the United States, she said Canada must keep its "fiscal powder dry."

"That means eschewing costly political gimmicks, which we can ill afford," she said, in an apparent rebuke of a recent sales tax holiday that critics said was too costly.

In another blow to the Canadian leader, Housing Minister Sean Fraser also resigned, describing Ms Freeland as "professional and supportive".

Ms Freeland said she would run for re-election in the next parliamentary polls. A vote is expected by October 2025.

Mr Trudeau has indicated he plans to lead the Liberals into the next election.

Some media suggested he might step down in the wake of Ms Freeland's bombshell exit, but his office flatly rejected the reports as "absolutely not accurate".